Energy Transfer LP

Sunoco LP’s acquisitions of NuStar and the Zenith terminals in May 2024 and March 2024, respectively, present several risks. Certain risks associated with these recently acquired businesses are described below, to the extent those risks represent new risks related to our business or existing risks that have become more significant. In some cases, certain elements of the risks described below are similar to the risks associated with our existing business that have recently been disclosed; however, such disclosure is repeated herein to fully describe the relevant risk.

The following risk factors should be read in conjunction with our risk factors described in “Part I — Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023.

Extended periods of reduced demand for or supply of crude oil, refined products, renewable fuels and anhydrous ammonia could have an adverse impact on Sunoco LP’s results of operations, cash flows and ability to make distributions to its unitholders.

A significant portion of Sunoco LP’s business is ultimately dependent upon the demand for and supply of the crude oil, refined products, renewable fuels and anhydrous ammonia it transports in pipelines and store in its terminals. Market prices for these products are subject to wide fluctuation in response to changes in global and regional supply and demand that are beyond Sunoco LP’s control. Increases in the price of crude oil may result in a lower demand for refined products that Sunoco LP transports, stores and markets, including fuel oil, while sustained low prices may lead to reduced production in the markets served by Sunoco LP’s pipelines and storage terminals.

Any sustained decrease in demand for crude oil, refined products, renewable fuels or anhydrous ammonia in the markets Sunoco LP’s pipelines and terminals serve that extends beyond the expiration of its existing throughput and deficiency agreements could result in a significant reduction in throughputs in its pipelines and storage in its terminals, which would reduce Sunoco LP’s cash flows and impair Sunoco LP’s ability to make distributions to its unitholders. Factors that tend to decrease market demand include:

•a recession, high interest rates, inflation or other adverse economic conditions that result in lower spending by consumers on gasoline, diesel and travel;

•events that negatively impact global economic activity, travel and demand generally;

•higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of gasoline;

•an increase in aggregate automotive engine fuel economy;

•new government and regulatory actions or court decisions requiring the phase out or reduced use of gasoline-fueled vehicles;

•the increased use of and public demand for use of alternative fuel sources or electric vehicles;

•an increase in the market price of crude oil that increases refined product prices, which may reduce demand for refined products and increase demand for alternative products; and

•adverse weather events resulting in decreased corn acres planted, which may reduce demand for anhydrous ammonia.

Similarly, any sustained decrease in the supply of crude oil, refined products, renewable fuels or anhydrous ammonia in markets Sunoco LP serves could result in a significant reduction in throughputs in its pipelines and storage in its terminals, which would reduce Sunoco LP’s cash flows and undermine Sunoco LP’s ability to make distributions to its unitholders. Factors that tend to decrease supply and, by extension, utilization of Sunoco LP’s pipelines and terminals include:

•prolonged periods of low prices for crude oil and refined products that result in decreased exploration and development activity and reduced production in markets served by Sunoco LP’s pipelines and storage terminals;

•macroeconomic forces affecting, or actions taken by, oil and gas producing nations that impact the supply of and prices for crude oil and refined products;

•a lack of drilling services, equipment or skilled personnel available to producers to accommodate production needs;

•changes in laws, regulations, sanctions or taxation that directly or indirectly delay supply or production or increase the cost of production of refined products; and

•political unrest or hostilities, activist interference and the resulting governmental response thereto.

Sunoco LP’s operations are subject to federal, state and local laws and regulations, in the U.S., in Mexico and in Europe, relating to environmental, health, safety and security that require it to make substantial expenditures.

Sunoco LP’s operations are subject to increasingly stringent international, federal, state and local environmental, health, safety and security laws and regulations. Transporting, storing and distributing hazardous materials, including petroleum products, entails the risk of releasing these products into the environment, potentially causing substantial expenditures for a response action, significant government penalties, liability to government agencies including for damages to natural resources, personal injury or property damages to private parties and significant business interruption. Further, Sunoco LP’s pipeline facilities are subject to the pipeline integrity and safety regulations of various federal and state regulatory agencies, as well as cybersecurity directives. In recent years, increased regulatory focus on pipeline integrity, safety and security has resulted in various proposed or adopted regulations. The implementation of these regulations has required, and the adoption of future regulations could require Sunoco LP to make additional capital or other expenditures, including to install new or modified safety or security measures, or to conduct new or more extensive inspection and maintenance programs.

Legislative action and regulatory initiatives have resulted in, and could in the future result in, changes to operating permits, imposition of carbon taxes or methane fees, material changes in operations, increased capital expenditures and operating costs, increased costs of the goods Sunoco LP transports and/or decreased demand for products it handles. Future impacts cannot be assessed with certainty at this time. Required expenditures to modify operations or install pollution control equipment or release prevention and containment systems or other environmental, health, safety or security measures could materially and adversely affect Sunoco LP’s business, financial condition, results of operations and liquidity if these expenditures, as with all costs, are not ultimately reflected in the tariffs and other fees Sunoco LP receives for their services.

Sunoco LP owns or leases a number of properties that were used to transport, store or distribute products for many years before Sunoco LP acquired them; therefore, such properties were operated by third parties whose handling, disposal or release of products and wastes was not under Sunoco LP’s control. Environmental laws and regulations could impose obligations to conduct assessment or remediation efforts at Sunoco LP’s facilities, third-party sites where Sunoco LP take wastes for disposal, or where wastes have migrated. Environmental laws and regulations also may impose joint and several liability on Sunoco LP for the conduct of third parties or for actions that complied with applicable requirements when taken, regardless of negligence or fault. If Sunoco LP were to incur a significant liability pursuant to environmental, health, safety or security laws or regulations, such a liability could have a material adverse effect on Sunoco LP’s financial position.

Sunoco LP operates assets outside of the United States, which exposes Sunoco LP to different legal and regulatory requirements and additional risk.

A portion of Sunoco LP’s revenues are generated from its assets located in northern Mexico and Europe. Sunoco LP’s foreign operations are subject to various risks that could have a material adverse effect on its business, results of operations and financial condition, including political and economic instability from civil unrest; labor strikes; war and other armed conflict; inflation; currency fluctuations, devaluation and conversion restrictions or other factors. Any deterioration of social, political, labor or economic conditions, including the increasing threat of terrorist organizations and drug cartels in Mexico, or affecting a customer with whom Sunoco LP does business, as well as difficulties in staffing, obtaining necessary equipment and supplies and managing foreign operations, may adversely affect Sunoco LP’s operations or financial results. Sunoco LP is also exposed to the risk of foreign and domestic governmental actions that may: impose additional costs on Sunoco LP; delay permits or otherwise impede Sunoco LP’s operations; limit or disrupt markets for Sunoco LP’s operations, restrict payments or limit the movement of funds; impose sanctions on or otherwise restrict Sunoco LP’s ability to conduct business with certain customers or persons or in certain countries; or result in the deprivation of contract rights. Sunoco LP’s operations outside the United States may also be affected by changes in trade protection laws, policies and measures, and other regulatory requirements affecting trade and investment, including the Foreign Corrupt Practices Act and foreign laws prohibiting corrupt payments, as well as travel restrictions and import and export regulations.

Sunoco LP could be subject to liabilities from its assets that predate its acquisition of those assets, but that are not covered by indemnification rights Sunoco LP has against the sellers of the assets.

Sunoco LP has acquired assets and businesses and is not always indemnified by the seller for liabilities that precede its ownership. In addition, in some cases, Sunoco LP has indemnified the previous owners and operators of acquired assets or businesses. Some of its assets have been used for many years to transport and store crude oil and refined products, and past releases could require costly future remediation. If a significant release or event occurred in the past, the liability for which was not retained by the seller, or for which indemnification by the seller is not available, it could adversely affect Sunoco LP’s financial position and results of operations. Conversely, if liabilities arise from assets Sunoco LP has sold, Sunoco LP could incur costs related to those liabilities if the buyer possesses valid indemnification rights against Sunoco LP with respect to those assets.